Zanzibar banks on oil exploration to boost economy

Zanzibar banks on oil exploration to boost economy

Zuhura Salim (35) is not sure she will ever get to work on time. She has been stuck in the queue at Mtoni petrol station waiting to fill her car.

She thinks of buying fuel on the black market at a higher price from some youths near the station, but she is afraid this could damage her car because the fuel may be adulterated.

Zanzibar has been experiencing frequent shortages of fuel due to insufficient storage at its depot at Mtoni area, north of the Stone Town.

The Islands require 10 million litres of fuel on a monthly basis on average, which includes kerosene, petrol, diesel and aviation fuel.

According to Zanzibar Utilities Regulatory Authority (ZURA), the islands have witnessed fuel shortages on not less than four occasions between January and December 2018.

Zuhura hopes that this problem will end in the next few years should the ongoing oil exploration activities in the Pemba-Zanzibar block bare fruit.

Although it is not always the case that country extracting oil never runs out of fuel, for example Nigeria and other developing oil producing countries, where people also frequently experience shortage of fuel with long queues.

Zanzibar has jumped onto the extractive industry development ‘band wagon’ so that it too can benefit from its natural resources.

Its petroleum sector received a boost in 2011 when the government and Ras Al Khaimah country signed a Memorandum of Understating (MoU) in various development sectors, including the extractive industry.

The MoU was followed by President Dr Ali Mohamed Shein signing into law ‘Oil and Gas bill’ which paved the way for the government to grant licences to investors.

The Petroleum Act (2016) was the key legal document used to identify the investors and also provided the guidelines to govern the sector.

The law established institutions to manage the resources which are the Zanzibar Petroleum Regulatory Authority (ZPRA) and the Zanzibar Petroleum Development Company (ZPDC).

Their first assignment was to identify companies capable of doing feasibility studies. This was done by calling for tenders through both the domestic and international media.

Out of which Ras Al Khaimah’s ‘RAKGAS Company- International, was granted a licence for the Pemba-Zanzibar block in 2017.

“As repeatedly emphasized by the authorities here, the much awaited resource belongs to the Zanzibari population. As such, evaluation criteria was crafted with an intention to secure greater ownership and benefits to Zanzibaris whilst also ensuring a win-win situation,” said ZPRA Director, Omar Zubeir Ismail, in an interview.

He said benefits to Zanzibaris are to include employment opportunities, training of Zanzibaris, local content issues such as supply of goods and services by Zanzibaris and proposed fiscal terms.

“Through the Production Sharing Agreement (PSA) singed last year, issues such as royalty, profit oil sharing, and protection of environment have been highly considered so that Zanzibar remain safe and its people sustainably benefit from the natural resources."

In his speech to mark the 55th anniversary of the revolution, President Shein said “we are making promising progress in developing the oil and gas sector. The discussion with Ras Al Khaimah in 2013 on various issues pertinent to the oil and gas sector paved way for the signing of PSA that took place on 23rd October, 2018 between the Zanzibar Petroleum Development Company (ZPDC) and RAK GAS.”

He said that according to the agreement, the RAK Gas has been officially authorized to undertake exploration activities in the Pemba- Zanzibar Block.

“I call upon the people of Zanzibar to be patient and rely on the Government for all information relating to the oil and gas exploration activities, as the Government is the only source that releases timely and reliable information on this specific matter,” Dr Shein said.

In an interview with this reporter, RAK GAS Zanzibar Manager, Mr Moamen Madkour, said the company has the capacity to carry out the work and has sufficient expertise.

He said Zanzibar and Ras Al Khaimah have long-established relations though initially there were no direct ties.

In 2015, Sheikh Saud Bin Saqr Al Qasimi, launched the first phase of a 100 wells project, worth $ 6 million.

The project was launched on November 13, 2015 by Zanzibar’s Second Vice- President, Ambassador Seif Ali Iddi, at Chumbuni area, Unguja.

Zanzibar also benefited from a project to strengthen higher education for its youth, worth $ 4 million.

“Before RAKGAS won the bid, Ras Al Khaimah had helped us in number of development projects such as education and pure and fresh water,” said the ZPRA director.

Minister of State, Zanzibar’s Second Vice-President’s Office, Mohammed Aboud Mohammed, said the citizens participated in each process of the research, including employment opportunities.

“Some people are already benefiting from the ongoing work in exploration- that do not require expertise, there are companies that also benefiting from the sale of goods and services to the workers,” Mr Aboud said.

Mohammed Salum, one of the labourers, acknowledges that the exploration activity has changed his life.

Since the work started in 2017, he has built a two-room house at Fuoni area in the Urban-West region.

Fatma Omar is a temporary employee in the BGP Company who also says that although the job was tough, it had helped her to get money for the needs of her schooling children, “Therefore, we are happy, the oil and gas resources project is helping us change the lives.”

FROM TABORA WITH LOVE: If it was possible, I would open a school for thieves

DEAR nephew Milambo Greetings from Dar es Salaam ...

Author: By DAILY NEWS Reporter

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